Governor lauds YTK decision, says Supreme Court ruling brings ‘finality and closure’

Governor Lou Leon Guerrero (PNC file photo)

Governor Lou Leon Guerrero has praised the Supreme Court decision ruling favoring the Port Authority of Guam in its appeal against the trial court’s decision to let an arbitration panel award $14 million to YTK Corporation.

In an interview with the Patti Arroyo show on NewsTalk K-57, the governor said the YTK case was a $15 million liability that has been hanging over GovGuam’s head since her administration was inaugurated.

She said the Supreme Court decision was a big win for the Port Authority of Guam and the people of Guam.

“I was elated! I was confident the case would be resolved in our favor. It’s been many years of fighting, but we know that court cases take a long time,” Leon Guerrero said.

When asked for her reaction if the YTK case is litigated again, the governor said: “I really don’t know. People will always appeal cases, but to my mind this is already a big closure in a big liability that the government had.”

She added: “You cannot have an award for an illegal contract … so for me that’s a finality. I’m so proud of the work of the port.”

YTK is the company involved in a dispute with the port on a lease for the government-owned Hotel Wharf. In 2016, an arbitration panel ruled in favor of YTK and awarded it $14 million in damages which the Superior Court upheld.

But in its decision overruling the trial court, the Guam Supreme Court found that the arbitration panel exceeded its authority and that the Guam Legislature has sole authority over the transfer of land owned by the government of Guam.

Under Guam law, the Legislature can authorize the Port Authority of Guam to enter into contracts transferring port-owned land “for a term not to exceed five years.”

Guam YTK had argued that this provision made its development agreement and lease a lawful transfer of government-owned land.

The Supreme Court, however, rejected this argument, finding that the development agreement and lease attempted to transfer land for a period of 45 years.

Because the Legislature never approved such a transfer, enforcing the terms of the lease would have caused the parties to engage in the illegal transfer or possession of government-owned land without the Legislature’s consent, the court ruled.

The arbitration panel’s decision to enforce the development agreement and lease were thus vacated and the trial court’s order confirming the amended arbitration award to Y2K was reversed.

Also reacting to the court decision, Port Authority of Guam general manager Rory Respicio said the port is very pleased with the ruling by the Supreme Court of Guam as it removes the cloud of uncertainty placed over the Port for the past two decades.

“While we could not have predicted this outcome it is most certainly a great day for the port and the people of Guam and we continue to focus on our plans to modernize and transform our facility into a safe, efficient and sustainable seaport for Guam and the Western Pacific Region,” Respicio said.

Meanwhile, former Port Authority of Guam board chairman Dan Tydingco said the Port was right in not acceding to any settlement demands from the company.

“At the end of the day, I’m just glad that the Supreme Court issued a sound decision that was argued based upon the law and also the pertinent issues,” Tydingco said.